Consumers set to spend big post-pandemic

Consumers are drawing up big spending plans for the post-pandemic period, with pent-up demand set to drive a bounceback for retailers later in the summer, according to survey data from EY.

A survey of 1,000 UK consumers found that anxiety remains around health and returning to non-essential retailers on 12 April, suggesting that the real spending boost will come later in the summer when larger numbers of consumers have been vaccinated.

The survey found that plans for the first wave of spending include hair cuts, holidays and days out, with 43 per cent plan on spending more on a holiday post-COVID-19, up from 31 per cent in October.

Consumers’ ability to spend will be supported by the currently elevated savings ratios, with 29 per cent planning on spending more on personal care services (such as hairdressers), nearly double the October figure of 17 per cent.

As well as expecting to spend on holidays, personal care and going out, almost one in five consumers expect to spend more on clothing (22 per cent) and beauty (18 per cent) in future.

Consumers are also revamping lifestyles and looking to get healthier, with plans to reduce their spend on alcohol (17 per cent) and tobacco (19 per cent) and increase spend on fresh food (20 per cent) and non-alcoholic beverages (11 per cent).

Meanwhile, the respondents said that the shift to online had highlighted deficiencies with websites, particularly in the grocery sector, with almost half (49 per cent) of consumers saying they do not shop online because they have less control over purchases, and just over one in ten (11 per cent) believe grocery websites are better than physical stores.

The survey suggests that what were online shopping ‘niggles’ are now full-blown pain points.

Half of consumers say that they are frustrated with expensive deliveries, 28 per cent by slow deliveries and 25 per cent by not being able to find what they are looking for easily.

However, the majority of those surveyed (55 per cent) believe the virus will only stop affecting their daily lives after most of the population is vaccinated.

EY said This suggests that the big ‘unlock’ in consumer behaviour will come later in the summer once most of the vaccination programme is due to be completed, rather than as soon as non-essential stores reopen on 12 April.

59 per cent of those surveyed said they avoid touching items when outside the home due to infection concerns.

Silvia Rindone, EY UK&I retail partner, said: “Consumers are ready to spend, particularly in areas relating to their social lives as they look to reconnect with loved ones in person. Retailers need to be prepared. To ease anxiety around returning to store, retailers will need to focus on providing reassurance to customers and employees alike, making them feel protected and secure by maintaining a heightened focus on hygiene and sanitation.

She added:“As consumers look for a return to in-person engagement and the in-store shopping experience, retailers need to engage customers with store events and activities. They simply can’t underestimate the power of the store and the consumer desire to re-engage with the social aspect of shopping.”

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